PPC to build $230m cement factory in DRC

1st October 2013 By: Natalie Greve - Creamer Media Contributing Editor Online

PPC to build $230m cement factory in DRC

Photo by: Bloomberg

South African cement producer PPC will build a $230-million, one-million-ton-a-year cement factory and associated quarry near Kimpese, in the western Democratic Republic of Congo (DRC), further accelerating its penetration-of-Africa strategy.

The group, which recently signed a memorandum of understanding with local development partner, the Barnet Group, noted that, while there were existing cement manufacturers in the region, the market remained severely undersupplied.

This was despite the DRC having the lowest cement consumption in Africa, at 16 kg per capita a year, which was in contrast with the South African average of 240 kg per capita a year and the global average of 400 kg per capita a year.

“This investment is indicative of our commitment to sub-Saharan Africa and we are very confident about the DRC. Some 22% of PPC’s revenue comes from outside South Africa at present, but the target is to increase this to 40% by our 2016 financial year,” commented CEO Ketso Gordhan, who has advocated for South Africa's government to speed up the roll-out of its infrastructure plans post-haste in recent times.

The company made significant progress with its Africa strategy in 2012, most notably with the acquisition of a 27% stake in the Habesha Cement Share Company, in Ethiopia, for $12-million and a 51% stake in cement company Cimerwa, of Rwanda, for $70-million.

PPC had also secured a Zimbabwean indigenisation certificate, which preceded the company announcing its intention to invest in a new one-million-ton-a-year cement plant in the capital Harare.

The announcement by PPC comes two weeks after DRC Industry and Small and Medium Enterprises Minister Remy Musungayi encouraged South Africa-based companies to participate in the investment opportunities offered by the country’s Special Economic Zones (SEZs).

An SEZ is a physical space that facilitates
access to essential infrastructure and land, and provides simplified mechanisms for business registration and operation.